Periodic System— Using Knowledge of Financial Statement Relations to Compute Missing Accounts

The following information relates to Payleast Shoes Company. Assuming the company uses the periodic inventory system, solve for the missing amounts a through m for years 2020 through 2022.

• Do not use negative signs in your answers.
• Round gross profit percentage to the nearest whole percentage point.

Adam & Smith Ltd purchases a machine on 1/07/2019 for $450,000. Expected life is 6 years using straight-line method and no residual value. For tax purposes, ATO allows the company to depreciate over 5 years. The profit before tax of the company for the year ended at 30 June 2020 is $550,000. Tax rate is 25%. Required: a) What is the amount of the temporary difference? Does this give rise to a deferred tax asset or a deferred tax liability? Provide relevant journal entries that relates to the temporary difference at 30 June 2020. b) Determine the taxable profit and the taxes payable and provide relevant journal entries at 30 June 2015. c) Provide one example of temporary differences that create a deferred tax asset and one example of a deferred tax liability. (7 marks. Word limit for part c: minimum 120 to maximum 250 words)

Please provide unique answer from others.

Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The equipment has an estimated life of five years and an estimated residual value of $9,000. Sample's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2017, but production subsequent to 2017 will increase by 10,000 units each year. Required: 1. Calculate the depreciation expense, accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life. Enter all amounts as positive values.

Straight-line method:

Units-of-production method:

Question 3 Harie Company has the following transactions related to non-current liabilities. On January 1, 2019, Harie Company issued 10% bonds with a par value of $1,000,000 due in 10 years. They were issued to yield 8% (i.e. the effective interest rate is 8%) and were callable at 102 at any date after January 1, 2020. Interest are payable semiannually on July 1 and January 1, starting from July 1, 2019.

Required:

(a) Compute the selling price of the bonds on January 1, 2019.

(b) Prepare a bond amortization schedule up to and including January 1, 2020.

(c) Prepare the journal entries to record the issuance of the bonds on January 1, 2019 and interest payment on July 1, 2019.

(Ignore any potential impact of the bonds’ callable nature on the selling price. Refer to the Appendices for Present Value tables and round your answer to the nearest dollar.)

Tomahawk County offers a defined benefit pension plan to all employees with at least 5 years of service (vested). The pension factor for this plan is 1.2%. As of the end of 2019, Maria, an employee, will have worked 14 years. Company accountants think that she will work 10 more years until retirement, at which time she will begin receiving annual pension payments. Maria makes $50,000 per year salary. The accountants also believe that Maria will probably leave with a $60,000 annual salary. The company is given a 4% interest rate. They expect that Maria’s retirement payments will be made for 25 years.

_______________4. Calculate the pension liability PBO for Maria for the end of 2020.

_______________5. Calculate the Prior Service Cost component of the pension liability PBO for Maria for 2020 if the pension factor is raised to 1.4%. The Prior Service Cost is the difference in the PBO under the new pension factor and the old pension factor.

Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,072,000. This cost figure included the following expenditures: Purchase price $ 1,910,000 Freight charges 36,000 Installation charges 26,000 Annual maintenance charge 100,000 Total $ 2,072,000 The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020. In 2021, after the 2020 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company’s controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment. Required: 1. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2021. 2. Ignoring income taxes, prepare any 2021 journal entry(s) related to the change in depreciation methods.

Depreciation and Rate of Return

Burrell Company purchased a machine for $19000 on January 2, 2016. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $9500 each year. The tax rate is 35%.

Required:

Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset.

Straight-line method. Do not round intermediate calculations. Round final answer to two decimal places.

2016: ____%

2017: ____%

2018: ____%

2019: ____%

2020: ____%

Double-declining-balance depreciation method. Do not round intermediate calculations. Round final answer to two decimal places.

2016: ____%

2017: ____%

2018: ____%

2019: ____%

2020: ____%

***Please show all work and calculations****

Partial information from the comparative balance sheet of Jackson Company as of December 31, 2020 and 2019 reflected the following selected account balances. From the information contained on the balance sheet and the additional information below, prepare the Net Cash Flows from Operating activities to answer the following two questions.  

Jackson Company

Comparative Balance Sheet Partial Information

                                                           2020                2019

Current Assets:

Cash                                                $114,000         $100,000

Accounts receivable                           18,400             20,700

Inventory                                            62,200             59,600

Current Liabilities:

Accounts payable                               29,300             26,600

Accrued liabilities                                9,700             10,100

Additional information:

Net income                                                       69,000

Depreciation expense                                         8,000

Question:

What is the amount of the total adjustments to net income (total of the adjustments column)?

See the previous question. How much is the net cash flows from operating activities?

Accounting for Dilutive securities and Earning per share.

On November 1, 2017, Larkspur Company adopted a stock-option plan that granted options to key executives to purchase 30,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $30, and the fair value option-pricing model determines the total compensation expense to be $450,000.

All of the options were exercised during the year 2020: 20,000 on January 3 when the market price was $69, and 10,000 on May 1 when the market price was $78 a share.

Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019.

Marigold Enterprises has a December 31 fiscal year end and uses straight-line amortization to the nearest month for its finite-life intangible assets. The company has provided you with the following information related to its intangible assets and goodwill during 2020 and 2021:

1.) Record the transactions and adjusting entries as required. (2020,2021)

2.) Show the balance sheet presentation of the intangible assets and goodwill at December 31, 2021.